Samsung Biologics Q3 revenue up 18.5%, operating profit 1%; annual guidance raised
In short
Samsung Biologics said on 21 October that third-quarter consolidated revenue was 1.4903 trillion won, up 18.5% from a year earlier, while operating profit rose 1% to 640.1 billion won. The company raised its annual revenue growth guidance from 15-20% to 20%.
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Samsung Biologics disclosed on 21 October that its third-quarter consolidated operating profit was 640.1 billion won, up 1% from a year earlier, on revenue of 1.4903 trillion won, up 18.5%. Yonhap reported that net profit fell 21.2% to 391.1 billion won, and that operating profit was 5.1% above the 609.0 billion won market forecast compiled by Yonhap Infomax. Several outlets rounded the revenue increase to 19%. [ 1 , 2 , 4 , 5 , 7 ]
The company raised its annual revenue growth guidance from 15-20% to 20%. Maeil Business and Seoul Economic Daily reported that the annual revenue forecast went from 5.32 trillion won, based on the midpoint of the earlier range, to 5.4684 trillion won. The company cited sound growth from full operation of plants 1-4, revenue from certification batches at plant 5 in the second half, and the stabilisation of commercial production at the Rockville facility in the United States, which it acquired in March. [ 2 , 5 , 7 , 9 ]
Operating profit grew far more slowly than revenue. The operating margin fell from 50.4% in the third quarter of last year to 43.0%. Hankook Ilbo reported that the company said the lower profitability of the Rockville plant weighed most on the margin, with plant 5 still ramping up. A company official quoted by Dong-A Ilbo said profitability would improve once production at the new plants normalises. [ 4 , 9 , 12 , 13 ]
Chosun Ilbo and Hankook Ilbo noted that Samsung Biologics split off Samsung Bioepis last November. Last year's third-quarter consolidated revenue including Bioepis was 1.6602 trillion won, against 1.2575 trillion won for the contract development and manufacturing (CDMO) business. Those outlets described the quarter as the largest ever for the CDMO business. [ 4 , 12 ]
Electronic Times and Seoul Economic Daily said the results came despite exchange rate moves and production disruption from a strike. Seoul Economic Daily said a strike in May raised concerns about production, and that disputes over pay and bonuses continued. Newsis reported that the union postponed a second general strike planned for the 26th after a court sided further with the company in an injunction appeal. Bloter said the cost-of-sales ratio rose 9 percentage points and gross profit rose only 2.1 billion won. [ 2 , 9 , 10 , 14 ]
The company also said that in the tender offer for Polypeptide Group, 87.88% of shares were tendered, above the 66.7% minimum condition. It plans to pay within 10 trading days after regulatory approval in Europe, India, Australia, Brazil and elsewhere. It opened a European sales office in the Netherlands in August. Korea Economic Daily headlined a report that Daishin set a target price of 2 million won. [ 2 , 5 , 6 , 7 , 13 , 15 ]
Why it matters
Revenue growth far outpaced operating profit growth, and the operating margin fell from 50.4% to 43.0%. The company attributed this to the new plants, and said profitability should improve once production normalises.
Key facts
- Samsung Biologics reported third-quarter consolidated operating profit of 640.1 billion won, up 1% from a year earlier, and revenue of 1.4903 trillion won, up 18.5%. [ 1 , 4 , 7 ]
- Net profit was 391.1 billion won, down 21.2%, according to Yonhap. [ 1 ]
- The company raised its annual revenue growth guidance from 15-20% to 20%, and its revenue forecast from 5.32 trillion won to 5.4684 trillion won. [ 5 , 9 ]
- The operating margin fell from 50.4% in the third quarter of last year to 43.0% this year. [ 4 , 9 , 12 ]
- Samsung Biologics said the growth came from full operation of plants 1-4, the ramp-up of plant 5 and revenue from the Rockville facility in the United States, acquired in March. [ 5 , 6 , 8 , 13 ]
- Cumulative orders since its founding stand at 117 contract manufacturing (CMO) and 184 contract development (CDO) deals, worth a total of $22 billion. [ 2 , 4 , 5 , 6 , 7 , 12 , 13 ]
- In the tender offer for Polypeptide Group, 87.88% of shares were tendered, above the 66.7% minimum condition. [ 2 , 5 , 6 , 7 , 13 ]
Confirmed by several sources
- Samsung Biologics disclosed third-quarter operating profit of 640.1 billion won (up 1%) and revenue of 1.4903 trillion won on 21 October. [ 1 , 2 , 4 , 5 , 7 , 8 , 9 , 12 , 13 ]
- The company raised its annual revenue growth guidance from 15-20% to 20%. [ 2 , 4 , 5 , 6 , 7 , 8 , 9 , 13 ]
- The operating margin fell from 50.4% to 43.0% year on year. [ 4 , 9 , 12 ]
- The company opened a European sales office in the Netherlands in August. [ 2 , 5 , 6 , 13 ]
- Payment for Polypeptide Group is planned within 10 trading days after regulatory approval from authorities including those in Europe, India, Australia and Brazil. [ 2 , 5 , 6 , 7 , 13 ]
Still unclear
- Quarter-on-quarter operating profit growth. Maeil Business gave 9.1% while Korea Economic Daily gave 9.2%; both gave 12.8% for revenue.
- The size of the year-on-year revenue and profit growth. Outlets reported revenue growth as 18.5% or 19% and operating profit growth as 1%; Seoul Economic Daily said 1.1% against the pre-spin-off CDMO business alone, so the figure depends on the base used.
- How much the labor dispute and exchange rates affected results. Electronic Times and Seoul Economic Daily said the results came despite exchange rate moves and strike-related production disruption, and Bloter said disruption costs were reflected in results, but no document quantifies the effect.
What local media are saying
Timeline, local time
- Yonhap reported the disclosure of third-quarter operating profit of 640.1 billion won. [ 1 ]
- Electronic Times reported the guidance raise to 20% growth. [ 2 ]
- Maeil Business reported the revenue forecast raised to 5.4684 trillion won. [ 5 ]
- Newsis reported the results alongside the continuing labor dispute. [ 10 ]